A joint housing loan is one of the options that help individuals to raise more finances, offer more flexibility in repayment, besides extra tax benefits. "These days, working couples go for joint home loan as they get the income tax benefit on their total earnings," says Amar Ranu, senior manager, wealth management - research, Motilal Oswal Securities. However, according to experts, if one is not careful, the very benefits for which you have taken the loan could be lost.

PAYMENT OF EMIS

When you take a joint home loan, you must plan your EMI payment. Depending upon your ownership of the house and income, you could work out a plan that helps both of you maximise your tax benefits. "The contribution to EMIs should depend upon the beneficial ownership of the house property. If both the borrowers have an ownership of 50:50, the EMIs should be shared in the same proportion. So, if there is an EMI of .`50,000 and the ownership of the house property is 50:50, the EMI should be divided at the same proportion, ie.`25,000 each.

However, if there is any change in ownership of property, the EMI should be divided accordingly," says Ranu of Motilal Oswal. But don't make the mistake of giving two different cheques for your monthly EMIs. KamleshRao, executive vice-president of Kotak Mahindra Bank says, "This is because for one month you cannot have two different instruments. Even through the ECS, a 50:50 sharing is not allowed. It is best that one person bears the entire burden of the EMI, while the other's salary is used to run the household."

TAX BENEFITS

Certain Income tax benefits are attached to a home loan. "As per the I-T Act, the interest on borrowed capital is allowable as deduction if capital is borrowed for the purpose of purchase, construction, repair, renewal or reconstruction of the property. Further, the interest on borrowing can be claimed as deduction only by the person who has acquired the property with the borrowed fund," says Suresh Surana, founder, RSM Astute Consulting Group. When it comes to a joint home loan, both the applicants can claim deduction under the provision. "However, in joint ownership scenario, each individual coowner will be entitled to a deduction of .`1,50,000 (.`30,000 in specific cases).

Thus, the interest deduction increases in case of joint ownership when compared with a single owner," says Jiger Saiya, direct tax partner, MZS & Associates. A couple can also claim deductions from the total income for repayment of the loan. "Under section 80C of the I-T Act, deduction from total income is available to the extent of .`1,00,000 in respect of any payment, re-payment, part payment and/or installment, towards the cost of purchase/construction of a new residential house property to any bank, financial institutions, etc," says Surana.